Recession Talk Over on GDP Growth

Futures popped about 6 points at 8:30am ET, as preliminary second quarter GDP of 3.3 percent seems to have ended talk of a "formal" recession.

MBIA up 17 percent pre-open, as it agreed to reinsure $184 billion of municipal bond risk from FGIC (its competitor). MBIA gets $741 million in premiums. Ambak up 13 percent in sympathy.

Elsewhere:

1) retailers continue to report very mixed results. A few were quite good:

a) Tiffany up 6 percent pre-open, reported earnings of $0.63, well above consensus of $0.55, and raised guidance for the full year. Foreigners continue to crowd into the flagship New York store: comp store sales were up 10 percent in the first half of the year at the flagship; outside of the New York flagship, U.S. sales were down 5 percent.

b) Fabric shop Jo-Ann Stores up 10 percent, had a smaller loss than expected, and gave full-year guidance above expectations. The take here is that more people are making their own clothes and doing their own decorating, and the company is the beneficiary.

Still, it seems that most retailers are continuing to either disappoint or bring down estimates for the full year:

a) Sears is really having problems. Earnings came in at $0.21 vs. expectations of $0.33 (last year they made $1.15). Sears U.S. comp store sales down 6.7 percent; Kmart down 5.6 percent.

b) Men's Wearhouse beat by a penny, but third quarter guidance at $0.36-$0.40 is well below consensus of $0.53.

c) Williams-Sonoma reported earnings about in line with expectations, but guidance of $1.03-$1.15 was well below expectations of $1.31.

2) Hey, worried about falling stock prices? Do what the Pakistanis did: decree that prices cannot fall. In response to a 36 percent decline in the Karachi Stock Exchange this year, the board of directors of that Exchange announced that shares would not be allowed to trade below their closing level as of Wednesday.